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THE BUDGET The budget is a summary statement indicating the estimated amount of revenue that the government requires and hopes to raise. It also indicates the various sources
Discount Rate (Bank Rate) This is the rate on central bank advances and is also called official discount rate or "minimum lending rate". When commercial banks find themselves
Q. Describe the Public Utility Monopoly? Public Utility Monopoly: Governmental authorities seize complete management and control of some utilities to protect social interest
Equilibrium Income In this model, aggregate desired expenditure has three components: Consumption, Investment and Government Expenditure:
Q. What is External Diseconomies? The expansion of an industry is likely to generate external diseconomies that raise the cost of production. An increase in the size of industr
A firm can produce steel with or without a filter on its smokestack. If it produces without a filter, the external costs on the community are $500,000 per year. If it produces with
Marginal Cost This is the increase in total cost resulting from the production of an extra unit of output. Thus, if TC n is the total cost of producing n
Advantages of a Free Market System Incentive: People are encouraged to work hard because opportunities exist for individuals to accumulate high levels of wealth. Choice
Reasons for Shift in Demand Curve Shifts in a price-demand curve may occur due to the change in one or more of other determinants of demand. Consider, for illustration, decreas
INSTRUMENTS OF CREDIT CONTROL The central bank employs several instruments to control aggregate credit in the country. While some instruments like the open market operations mi
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